APEX Announces Withdrawal of Issuer Bid

CALGARY, ALBERTA--(Marketwire - Oct. 22, 2012) -APEX PHARMACIES LTD. (the "Company" or "APEX") announces the withdrawal of its offer (the "Offer") to purchase up to 1,538,461 common shares of the Company ("Common Shares") from its shareholders at a price of $0.65 per Common Share, which was initially made by way of a formal issuer bid circular dated August 20, 2012 (the "Bid Circular"), as extended for a period of thirty (30) days on September 25, 2012, with the expiration date of the Offer being amended and extended to 5:00 p.m. (Calgary time) on October 25, 2012.

As noted in the Company's Bid Circular that was mailed to its shareholders on or about August 20, 2012, APEX has previously examined potential divestitures of all or a portion of its assets or Common Shares from time to time, however it has not received any viable offers that the Board of Directors have considered to be reasonable or in the best interests of the Company and its shareholders, taken as a whole. As further noted in the Bid Circular, the Company did receive interest from a potential strategic acquirer prior to the date of the Bid Circular, however after a good deal of communication with the other party, the Board determined that a transaction could not be completed on terms that management and the Board felt were in the best interests of the Company and its shareholders, taken as a whole.

On September 23, 2012, the same party with whom such discussions were previously held delivered a set of materials to the Company expressing its interest to engage in further discussions concerning the purchase and sale of the Company's Common Shares, the shares of its subsidiaries or the sale of all or substantially all of its assets. Given that the materials provided by the potential strategic acquirer included a range of financial information, conditions, criteria and tax implications it could not be determined at that time whether this expression of interest represented a viable offer, nor whether it would ever become a viable offer for potential divestiture. As a result, the Board determined it to be in the best interests of its shareholders to extend the Offer for a period of thirty (30) days so that a preliminary review could be conducted and various undeterminable components of the aforementioned expression of interest could be assessed and potentially quantified. In accordance with applicable securities laws and regulatory policies, the Company filed a Notice of Change and Notice of Variation on SEDAR and a copy was mailed to its shareholders.

On October 5, 2012, the Company responded in writing to the potential strategic acquirer delineating a variety of matters that the Board determined were indeterminate or uncertain in respect of the expression of interest and invited the other party to expand upon and clarify these matters. The list of items requiring further clarification and quantification was extensive. In addition, bearing in mind the highly competitive nature of the pharmacy industry and that the party making the expression of interest is an industry competitor of APEX that has previously expressed its intentions to enter into direct competition with APEX within southern Alberta, the Company requested a break fee from the potential strategic acquirer in the event that a transaction is not completed between the parties, as well as confirmation of such party's ability to finance any potential transaction. To date, no further delineation of the components or any other response has been received from the party making the expression of interest and the Company therefore remains unable to further assess or quantify the expression of interest or to determine whether it represents, or may become, a viable offer for potential divestiture in the future.

Although the Board does not foresee the matters delineated in its response being resolved to its satisfaction within the reasonably foreseeable future, nor does it anticipate this expression of interest leading into formal negotiations for an offer and sale of the Company, its assets or its subsidiaries, the expression of interest has nevertheless created an element and environment of uncertainty that has rendered the completion of the Offer and take-up of tendered securities inadvisable at this time. As a result, the Board of Directors has determined to withdraw the Offer. Any certificates representing securities that were tendered to the Offer and delivered to the Depositary will be returned to shareholders at their address of record or as otherwise instructed in their tendering correspondence. Notwithstanding the withdrawal of the Offer at this stage, APEX remains committed to pursuing its long-term business plan and reserves the right to re-consider future re-purchases of Common Shares from time to time in accordance with applicable securities laws.

Reader Advisory

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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